From the mid-1990’s to the mid-2000’s, U.S. and Canadian biotech stocks were essentially neck and neck. Then Canada got crushed by the long nuclear winter that began in 2007 and the U.S. traded sideways until 2011. Now, the biotech space in the U.S. is hot, with the U.S. Biotech Index (NBI) breaking out of a multi-year base to all-time highs last year. But what about the biotech space in Canada? Are investors interested?
Until recently, Canadian investors obsessed over the quick returns of the mining sector boom and certainly favoured precious metal stocks over biotech stories. As the market sentiment for mining and resources having cooled, investor attentions appear to be returning to the life sciences space.
Here is just a small sampling of Canadian life sciences companies and the year-over-year returns investor have realized:
Obviously only time will tell if the Canadian life sciences space will be able to catch up to the similar space in the U.S. But for those investors who understand life sciences, there may well be some very handsome returns to be had. However, the rather long investment horizon means that investors should educate themselves on the product, the timelines, and the regulatory process involved.
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